The project commissioned by the Directorate-General for Taxation and Customs Union (DG TAXUD) of the European Commission focuses on refining and updating the Intrastat-based methodology used to estimate the VAT compliance gap attributable to Missing Trader Intra-Community (MTIC) fraud.
The main objective of the study is to reduce uncertainty regarding both the scale of MTIC fraud in the European Union and the most robust methodological approaches for measuring it. The project builds on the Commission’s 2024 analytical work, which assessed alternative estimation methods and tested a machine-learning-based approach using Intrastat mirror statistics for EU trade in goods covering the period 2010–2023.
MTIC fraud exploits the VAT exemption applied to intra-Community trade. Fraudulent traders collect VAT on domestic sales of goods acquired cross-border and subsequently disappear without remitting the tax to national authorities. Given that the EU VAT compliance gap amounted to EUR 128 billion in 2023 (9.5% of the VAT Total Tax Liability), improving the measurement of its MTIC component is essential for evidence-based policymaking and effective anti-fraud strategies.
Objectives of the Study
The project pursues four main objectives:
- Methodological refinement – assess and improve the Intrastat mirror-statistics approach, including the machine-learning-based estimation model previously tested for 2010–2023 EU trade in goods.
- Reduction of estimation inaccuracies – identify potential sources of bias and measurement error and propose targeted methodological enhancements.
- Strengthened monitoring framework – review existing performance indicators and recommend updates for continued MTIC gap monitoring.
- Improved accessibility and transparency – develop user-friendly tools and visual outputs for both authorities and the public.
Expected Impact
By strengthening the methodological foundations for estimating the MTIC gap and improving the accessibility of results, the study will contribute to:
- More reliable measurement of VAT losses linked to cross-border fraud,
- Better-informed policy responses at EU and national levels,
- Enhanced transparency and comparability of VAT gap monitoring,
- Stronger cooperation between Member State tax administrations.
The MTIC Gap 2026 study represents a key step towards a more consistent, data-driven approach to measuring and combating VAT fraud in the European Union.
Framework Contract: TAXUD/2024/CC/176
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